Maturing nicely

With mature field operation an increasingly lucrative part of oil firms’ production portfolios, O&G speaks to Hamed Karim of Egypt’s PICO Petroleum to find out the key issues.

PICO International Petroleum is a successful independent operator in the Egyptian oil and gas sector. Since its inception 1989, PIP has grown to become the largest private Egyptian E&P player and the third largest producer in Egypt's Gulf of Suez Region.

Over the past decade, activities have focused on the development of mature oil and gas fields and near-field exploration in Egypt, where it has successfully assumed operation of six concessions - four offshore in the Gulf of Suez, and two onshore in Egypt's Western Desert. Furthermore, PIP also holds non-operating equity shares in one more offshore concession in the Gulf of Suez that is currently being operated by the General Petroleum Company (GPC), and equity shares in one other field in the Western Desert. All were acquired from major oil producers such as Shell, Total and British Gas, allowing PIP the chance to adopt and then customise the high levels of operational and managerial standards inherited from these major players.

The company has demonstrated strong operating and financial performance during the past few years. In the five-year period 2003-2008, net production has increased by more than 100 percent. Furthermore, PIP has maintained an average reserve replacement ratio of 152 percent over that period.

Capitalising on its previous experience and technical know-how, PIP intendeds to focus on operating mature oil fields in Egypt and other parts North Africa, Middle East and SE Asia - and as such the firm's General Manager for Exploration and Deputy Business Development Manager Hamed Ibrahim Karim has a critical role to play. Here, he speaks to O&G's Ben Thompson about the key issues in mature field development.

PICO focuses on the development of mature oil and gas fields with upstream potential. In your experience, what are the main challenges related to operating in mature fields? Hamed Ibrahim Karim. The challenges of operating in mature fields are many, but the main one is how to keep the reservoir in an active condition and keep the decline rate as low as we can, while looking at the best ways and techniques to help maintain these conditions. Maintaining the reservoir pressure and reducing the manifold pressure - allowing wells to flow in steady way - is essential. Using the proper technologies to support the reservoir is one of the main challenges, and managing the reservoir behaviour is also key. Controlling the water production and handling wastewater and oily water is another important aspect.

What technologies/solutions are you currently utilising to overcome some of these challenges and breathe new life into mature fields?

HIK. The most important one is water flooding, and we are using this technique in our Gemsa field in the Gulf of Suez. The second is artificial lifting and this technique is widely used in several fields, including jet pumping and electric submersible pumps (ESP). Auto gas lift has been used in fields where we have gas zones above the oil zone. We use this gas to lift the oil and it works very efficiently. Chemical treatment is also playing a key role in production enhancement, both down-hole and in surface facilities, while extended reach and highly deviated wells have been used to maximise the productivity of the reservoirs. A cable-deployed system is also used to maintain and replace down-hole pumps without using a work over rig, especially in offshore fields. It saves a lot of time and money, plus reduces the cycle time of failures.

Now more than ever, identification of field-specific problems is crucial. How do you ensure that the techniques you are employing for each oilfield address the specific issues of that field?

HIK. As a company we are ensuring that each technique reflects the optimum way of improving that field, and that we are applying fit-for-purpose technology. When identifying field problems, we use the proper tools to identify and diagnose the cause of the problem; only once we know what that problem is can we select the correct way to solve it.

For example, we had heavy scaling in one of our offshore producing pipelines and we tried to pig it several times with no success. So we started to look at other solutions, and decided to inject a certain chemical to dissolve the hard scale. We did this in doses until we were confident that if we filled the whole line we would be able to remove most of the scale. And we were very successful: we recovered almost 60 tons of hard scale out of the line, and were able to then pass an eight-inch hard pig through the pipe and retrieve it successfully. The pressure inside the line went back to normal, reducing the pressure from 450psi to 150psi, which was our ultimate goal.
 
What role must operating companies and services providers play in terms of finding a better way to recover more oil?

HIK.Operating companies and service providers should work closely together to identify the cause of the problems and find the proper solution for each one. Working as a team is the most successful way in our industry, and sharing information and experiences will expedite finding the right solution and will minimise the losses for each party. Maximising the profit share and minimising the costs become the ultimate goals for everyone when you employ teamwork.

In your opinion, is greater investment in enhanced oil recovery needed over the next few years?

HIK. This is definitely true. We are still underinvesting in enhanced oil recoveries, while the amount of oil still underground remains significant. If we can increase the current recovery factor by 5-10 percent we'll produce almost 30-40 percent more oil in addition to the current production levels.

Now with oil at US$70-85 per barrel we can spend more money on enhanced oil recovery research, and the overall returns will be tremendous for both the industry and investors.

Countless techniques have emerged in recent years to enhance the oil recovery process. How successful have these techniques been? Do we need to think about taking new approaches, or can we build upon the techniques we already have?

HIK. In reality, we need to do both. We need to continue building upon the techniques we are already applying and we need to think about taking new approaches to accelerate the process and to find more productive techniques to encourage the companies and the managerial system to accept taking this approach.

One of your stated objectives as a company is to maintain a minimum reserve replacement ratio of 150 percent for the next three years. How close are you to achieving this objective, and what techniques are enabling you to meet your target?

HIK. We are achieving ever better objectives in our attempts to increase reserve replacement, and this 150 percent and above target ratio has been achieved several times. Fortunately we have made a good progress in the last five years, and our achieved reserve replacement ratio reached 152 percent in some of those years, exceeding preset targets. Our strategy of drilling in new areas near to our producing wells, targeting different reservoirs, applying fit-for-purpose techniques in our work-over campaign and using enhanced oil recovery techniques have all played a key part in this. Artificial lifting and water flooding were the most effective techniques in enabling us to maintain the reserve ratio replacement, plus directional drilling and near-field exploration as well.

About

Hamed Ibrahim Karim worked at Gulf of Suez Petroleum Co. from 1980-1997 as Well Site Geologist, then Production Geologist. After a spell in the exploration department as Exploration Geologist and Field Study Team Leader for the first field study team in the company, he then moved back to the geological operation division as Division Manager. In 1997, Hamed joined Numeral Services Co. as Middle East Representative and Technical Advisor before joining Halliburton Oil Services as Technical Advisor for Logging and Perforation; and from 1998-2006, he was with BP as Account Manager and Business Segment Manager for Egypt and Libya. In 2006, Hamed joined PICO International Petroleum as Exploration General Manager and Deputy Business Development Manager.